Canada canceling purchase of new Boeing fighter jets

Ellis Copeland |Thursday, December 07, 2017

Relations between Canada and USA aerospace company Boeing have continued to deteriorate, with the Canadian government now walking away from plans to buy 18 Boeing Super Hornet fighters. The Royal Canadian Air Force (RCAF) will likely purchase 28-30 used fighter planes from the Australian military, according to reports Tuesday.

However, talks with Boeing over the planned acquisition were suspended by Canada after Boeing launched a trade challenge against Canadian plane-maker Bombardier in April, accusing the company of dumping its jet into the U.S. market and claiming the company received unfair subsidies from the Canadian government. The funding allowed Bombardier to significantly lower the cost per aircraft, Boeing argued.

The U.S. Department of Defence said in September that the contract for the Super Hornets could be worth up to $6.4-billion.

Defence Minister Harjit Sajjan has said Canada can not meet all of its obligations to the North American Aerospace Defence Command (NORAD) and the North Atlantic Treaty Organization (NATO) with its current fleet of CF-18s, arguing new fighter jets are needed before the entire fleet is replaced in the next decade. That legal process continues with final rulings expected by the U.S. International Trade Commission early next year. The Canadian company says Boeing, which did not offer any of its own aircraft to Delta, could not have been harmed by its actions, which it maintains were in line with worldwide rules.

Canadian Prime Minister Justin Trudeau has said the country "won't do business with a company that's busy trying to sue us and put our aerospace workers out of business".

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It is understood the Royal Canadian Air Force needs 28 to 30 used F/A-18 fighter jets to fulfil its global commitments to the North American Aerospace Defense Command (NORAD) and the North Atlantic Treaty Organization (NATO). An official announcement is expected in the coming days.

Canada had decided it needed Boeing's new Super Hornets to refresh its aging CF-18 Hornet fleet, but may have had a change of heart after the American manufacturer accused Canadian plane maker Bombardier of dumping in the commercial plane market. "It would be a deeply unfortunate outcome", he said.

"As with any of our customer's decisions, we are there for the long term and in Canada, we have had a proud history with them for decades". It's not just the company but countries. "Unfortunately, I think they're taking advantage of a [political] context that's favourable to them".

Shares of Boeing fell 0.86 percent during Tuesday trade on the New York Stock Exchange.

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